Aaron messes with a boiler room idiot
Reader comment: Dan says "I met one of these characters--live, in person. I was in New York with a coworker, and we hung out with this guy for dinner. I grilled him about how this works, and at least in his case, it's not particularly sinister.
"The cold caller is a wannabe stock broker. He works with a relatively legitimate investment bank. They come up with a few stock picks, then send the legion of wannabes to coldcall potential investors. The guy told me his standard pitch, all the variations, etc. Here's the interesting part. He also told me how to spot a 'legit' guy peddling lousy stocks legally from a true scammer out to commit outright fraud.
"The way you can tell is the Magic 3 Questions. In order for a broker to legitimately acquire a customer, they have to ask: 1) Net worth 2) How long have they been investing 3) Do they have a broker (they must have a broker) If they got someone who was good to go but didn't answer properly, they had to hang up on him. A frustrating business indeed. Judging by the call, this guy was asking the questions, so he's relatively legit.
"If you really feel like ruining these poor sop's day, here's what my FOAF was most afraid of: The guy can tell you to buy the stock. They'll purchase the stock for him immediately and bill him. Say the stock drops 3 days later. The guy says f--- you, I'm not paying. Guess what? They write off the loss. Not worth it to collect (according to him). Oh, and there's another thing he hates. Once he tells you the stock, you're not obligated to buy it from him. You can go buy it from etrade or whatever and dodge his extortionist fees.
"All this assumes, of course, that you have some interest in buying a randomly chosen stock espoused by a telemarketer.
"Anyway, the guy wasn't a saint, but like any telemarketer, he was just a cog in a machine of misery, hawking a product of dubious value. Have pity, and hang up."
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